Payment Bank is a new concept of RBI which came with the recommendation of the Nachiket Mor Committee. To run a Payment Bank a License is required. There are certain documents for Payment Bank License. In this write up those documents for Payment Bank License will be discussed in detail. But before unveiling the documents, we should know about the concept of a Payment Bank. Payment Banks are registered under the Companies Act 2013. But governed by much other legislation like Banking Regulation Act, 1949, RBI Act, 1934, etc. They cannot issue credit cards or loans. However, they have the right to issue a Debit or ATM Card. 

What is Payment Bank?

Payment Banks are financial institutions with minimal credit risk. The main objective of Payment Banks is to help the migrants, labor class, low-income households, small entrepreneurs, etc. They are not universally established banks. They operate on a smaller scale. The minimum paid-up capital mandatory for the Payment Banks is Rs. 100, 00, 00,000. A Payment Bank License is mandatory to operate the Payment Banks.  India currently has six Payment Banks namely Jio Payment Bank, Paytm, Fino, India Post Payment Bank, Airtel Payment Bank, and NSDL Payment Bank.

Who can run the business of Payment Bank?

1.   Non-Banking Finance Companies (NBFC).

2.     Entities engaged in the Telecom Sector. 

3.     Super Market Chains.

4.     Real Sector Corporative owned and managed by public sector entities. 

5.      Pre-Paid Payment Instrument (PPI) issuers authorized working under PSS, 2007. 

6.     Individuals or professionals.

7.     Promoters or Group of Promoters having a joint venture with Scheduled Commercial Banks. 

How can one get the Payment Bank License?

RBI^[1] issues the Payment Bank License under Section 22 of the Banking and Regulation Act, 1949. An application needs to be made by attaching the entire documents for a payment Bank license. Following is the process through which one can get the Payment Bank License- 

Step-1 Fill the Form-3^rd according to Rule-11 of Banking and Regulations and make the application to Chief General Manager. 

Step-2 Chief General Manager will submit Form-3^rd to the Department of Banking Regulation i.e. RBI.

Step-3 Checking of the eligibility criteria.

Step-4 External Advisory Committee will scrutinize or verified the documents for Payment Bank License and other compliances. 

Step-5 External Advisory Committee either rejects the Form or provides the Principal approval. 

Step-6 If approved then within 18-months one has to start the business. 

Require documents for Payment Bank License

There are requirements for some documents for Payment Bank License. These documents have been divided into three parts. First, the documents related to the individual promoters, second, the documents which are related to the company promoting the bank, and the last is documents related to the Companies and members in the promoters group. A list of documents for payment bank license is given below- 

Documents for Payment Bank License related to Individual promoters

1.     Name of the Individual Promoter.

2.     Address and Date of Birth of the Individual promoters.

3.     PAN Card details.

4.     Name of the Guardian.

5.     Bank and Branch details.

6.     Detail of credit facilities.

7.     Details of working background and experience.

8.     Details of the company’s financial records.

9.     Track record of the Company. 

Documents for Payment Bank License related to the Company Promoting the Bank

1.     Article of Association.

2.     Memorandum of Association.

3.     Last three years Income Tax Return. 

4.     Last five years Financial Statement of the company. 

5.     Vital economic indicators of the entity.

6.     Pattern of shareholding of the Company.

Documents for Payment Bank License Related to the Companies and members in the promoter’s group

1. Names of the Companies and members.
2. Corporate structure of all the companies included.
3. Details of shareholding.
4. Yearly report of the last five years of the group of companies.
5. Name of all the entities and individuals in the promoters group with the following details- 

• • Date of incorporation 
  • Complete details of activities related to the company.
  • Address of Company’s registered office.
  • PAN/TAN/CIN Numbers.
  • Bank Account Number. 
  • Tax liabilities of the entity.
  • Details of stock listing.
  • Branch details of the entity.

Benefits of the Payment Bank

1.     Helps in the expansion of rural banking. 

2.     Financial inclusion is the advantage of the Payment Bank.

3.     Formal financial system will expand.

4.     High-value transaction is possible because of Payment Banks.

5.     Efficiently deals with low value.

6.     Diversification is possible due to Payment Bank.

Conclusion

In 2013 Payment Bank came to help the banking sector. This bank requires a license. One can get the License easily if providing all documents for Payment Bank License properly. Payment Banks came to promote cashless transactions. Payment Bank’s existence is dependent on the IT infrastructure. Because it needs safe cashless monetary transactions. It will also promote digitalization. It will help the banking sector to provide services with just one click. It is an advanced technology that will make the transaction cashless and hustle-free. If you have any doubt regarding the Payment Bank license or documents for Payment Bank License you can take help from the Bizadvisors who have great expertise in the same. 

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